Cloud Computing News: AWS, Deloitte Layoffs; Azure, Google Cloud Numbers
The tech sector continues to see perhaps more than its share of job cuts. And earnings season is here.
![Cloud Roundup, cloud computing news Cloud Roundup, cloud computing news](https://eu-images.contentstack.com/v3/assets/blt10e444bce2d36aa8/blt962474c79b72cb35/6523f8d5725d3b6cfebd9ca3/Cloud-Roundup.jpg?width=700&auto=webp&quality=80&disable=upscale)
Shutterstock
Amazon is carrying out more of its previously announced 9,000 layoffs.
The ongoing cuts impact employees inside Amazon Web Services as well as human resources.
“It is a tough day across our organization,” AWS CEO Adam Selipsky told staff in a memo on April 26, according to CNBC.
People in the United States, Canada and Costa Rica received notifications, although the New Zealand Herald reports that workers there are getting hit, too. Selipsky did say AWS is following “local processes” in other regions, which indicates that people in other areas also are affected.
Earlier this year, Amazon axed 18,000 employees; the 9,000 come on top of that number for a total of 27,000. As with Microsoft Azure and Google Cloud, AWS is enacting layoffs in the wake of COVID-19-era overhiring.
“Both the size of our business and the size of our team have grown significantly over recent years, driven by customer demand for the cloud and for the unique value AWS provides,” Selipsky said. “This growth has come quickly as we’ve moved as fast as we could to build what customers have needed. Given this rapid growth, as well as the overall business and macroeconomic climate, it is critical that we focus on identifying and putting our resources behind our top priorities — those things that matter most to customers and that will move the needle for our business. In many cases this means team members are shifting the projects, initiatives or teams on which they work; however, in other cases it has resulted in these role eliminations.
Amazon on April 27 will release its latest financials. Analysts predict the retail behemoth to post earnings of 25 cents per share; that would represent a 19% year-over-year change.
Thanks to an accounting change, rather than a significant increase in sales, Google Cloud has reported its first-ever profitable quarter.
Last week, Alphabet, parent company of Google Cloud, restated operating income for cloud and some other segments. That meant, on paper, lower cloud losses for 2021 and 2022. And, for the first quarter of 2023, it further meant a gain of $191 million, compared to the year-ago loss of $706 million.
“Certain costs associated with corporate initiatives supporting consumer-facing activities, previously reflected in unallocated corporate costs, are now allocated to Google Services; and centrally managed shared research and development activities, including our shared developer tools, are now allocated based on an updated measure of the relative benefit derived from the services,” Alphabet said in a filing.
Meantime, Google Cloud on April 25 reported revenue of $7.4 billion. That marked an increase of 27.5%, up from $5.8 billion in the year-ago quarter. The figure aligns with the average quarterly growth the hyperscalers have shown for the past couple of years, though it has slowed from the fourth quarter of 2022, which showed 32% growth.
Cloud providers are facing somewhat of a slowdown as organizations battle ongoing macroeconomic pressures. As one response to hyperinflation and other challenges, customers are paying more attention to their cloud spending. Rather than cutting services across the board, necessarily, they are optimizing their environments. That shift impacts how much they pay to vendors such as AWS. Especially during the pandemic, businesses deployed cloud resources willy-nilly so they could support remote work, and most IT departments did not dedicate much effort to controlling those expenses.
But times have changed. As such, cloud providers are reacting by laying off thousands of employees. Alphabet so far has cut 12,000 jobs, which have impacted groups including Google Cloud.
Even so, Sundar Pichai, CEO of Alphabet, received $226 million in 2022, most of which came via stock compensation. He also got $6 million for a personal security detail.
Microsoft’s fiscal third-quarter earnings are in the books and cloud computing helped the software company in a big way.
While Microsoft does not report Azure numbers, it does tie them into its Intelligent Cloud business. That segment comprises Azure public cloud, enterprise services, SQL Server and Windows Server. Combined, those groups generated nearly $22.1 billion in revenue, a 16% increase from the same period a year earlier.
Azure and other cloud services specifically saw 27% growth, Microsoft said, although, again, it did not disclose the actual figures. The 27% tracks with rival Google Cloud’s quarterly growth and what analysts are predicting to see from AWS later this week. In its second fiscal quarter, Microsoft said Azure and other cloud services revenue totaled 31%. So, just like its peers, Azure is dealing with slowing customer demand, not just due to perhaps lower usage but better optimization of existing cloud resources.
Overall, Microsoft raked in $18.3 billion, or $2.45 per share, up from $16.73 billion, or $2.22 per share, a year ago. Revenue, meanwhile, totaled $52.9 billion. Analysts had expected that figure to come to $51 billion.
Peripherally related to cloud and directly related to the week’s slew of earnings reports, wireless giant Verizon unveiled its quarterly numbers.
The company saw revenue drop on both the consumer and business fronts. Consumer sales fell 1.7% year-over-year to $24.9 billion in the first quarter; Verizon cited lower wireless equipment revenue.
Verizon Business also saw some slumps. Revenue in that division totaled $7.5 billion, down 2.8% year-over-year. Operating income decreased as well, down 18.1% to $551 million. Similar to its consumer segment, Verizon Business pointed to fewer wireless equipment sales and overall decreasing wireline revenue.
Verizon and its ILEC rival AT&T have both reported declines in business wireline over the last year. That said, Verizon is seeing growth in its wireless service revenue. In the first quarter of this year, the company saw that number go up 5.3%, to $3.3 billion. Moreover, fixed wireless stayed red hot, with Verizon reporting 137,000 business fixed wireless net additions in the quarter.
—Contributed by James Anderson, Senior News Editor
Deloitte is shedding more than 1,000 jobs in the United States.
The global consultancy earlier this month told staff 1,200 people — or 1.5% of the company’s U.S. workforce — would lose their roles.
Deloitte attributed the losses to a slowdown in mergers and acquisitions. Worldwide, organizations have hit the brakes on M&A due to inflation, overstaffing, skills shortages and more.
Deloitte’s layoffs come on the heels of competitor EY’s 3,000 job cuts. Overall, the tech sector has suffered more than 183,000 job losses just in 2023, according to Layoffs.fyi.
VMware’s stock continued to trade lower on April 26 on word that the UK has blocked the $68.7 billion Activision-Microsoft deal.
VMware itself is waiting to become part of Broadcom in the $61 billion agreement forged between the companies last year.
The transaction marked the second-largest of 2022 and has since faced formidable opposition, particularly in Europe. The UK’s decision could impact whether regulators there and in other countries will give Broadcom-VMware the thumbs-up.
On the Activision-Microsoft news, VMware’s stock dropped 2.5%. Broadcom’s had fallen less than 1%.
Accenture and Google Cloud are expanding their partnership to include more focus on cybersecurity.
The consultancy and the world’s third-largest cloud provider have worked together since 2018. The wider scope of their efforts, announced this week, brings Google Cloud’s security-specific generative AI to Accenture’s new managed extended detection and response service.
Accenture will offer its crisis management, incident response and threat intelligence through Mandiant, the cybersecurity firm Google purchased last year for $5.4 billion. Overall, the companies’ services will integrate with common security technology platforms and other clouds, they said.
“When powered by generative AI, our integrated cybersecurity services should enable a new level of cyber resilience, with greater scale, speed and effectiveness,” said Paolo Dal Cin, who leads Accenture Security.
That AI security focus will “help businesses defend against the most sophisticated cyber threat actors,” said Sunil Potti, general manager and vice president of cloud security at Google Cloud.
Accenture and Google Cloud are expanding their partnership to include more focus on cybersecurity.
The consultancy and the world’s third-largest cloud provider have worked together since 2018. The wider scope of their efforts, announced this week, brings Google Cloud’s security-specific generative AI to Accenture’s new managed extended detection and response service.
Accenture will offer its crisis management, incident response and threat intelligence through Mandiant, the cybersecurity firm Google purchased last year for $5.4 billion. Overall, the companies’ services will integrate with common security technology platforms and other clouds, they said.
“When powered by generative AI, our integrated cybersecurity services should enable a new level of cyber resilience, with greater scale, speed and effectiveness,” said Paolo Dal Cin, who leads Accenture Security.
That AI security focus will “help businesses defend against the most sophisticated cyber threat actors,” said Sunil Potti, general manager and vice president of cloud security at Google Cloud.
The world of cloud computing is hopping this week. For starters, workers in this part of the tech sector, once considered a bit immune to economic challenges, are enduring another round of layoffs. Over at Amazon Web Services and consultancy Deloitte, things are looking a little bleak for a number of folks. We cover those developments in the opening part of the slideshow above.
There’s more happening in cloud computing, of course. In addition to the latest wave of layoffs, we’ve got a look at the first round of cloud providers’ quarterly earnings. Microsoft, which runs Azure, and Google Cloud lead the way (we’ll get the lowdown on AWS’ figures when Amazon releases its numbers April 27). And Google Cloud, for its part, announced some first-ever news, which we want to point out comes with a bit of a caveat.
Next up, a little ditty on how UK regulators’ blocking of the Activision-Microsoft deal is affecting VMware. Cloud computing vendor VMware, recall, is awaiting approval of its acquisition by Broadcom. So far, competition watchdogs in Europe have not been so friendly toward the transaction. And the UK’s move on Activision-Microsoft has wrought a subsequent, trickle-down effect on VMware.
Look for a couple of other cloud computing items in our roundup as well.
Want to contact the author directly about this story? Have ideas for a follow-up article? Email Kelly Teal or connect with her on LinkedIn. |
Read more about:
MSPsAbout the Author(s)
You May Also Like